Thursday Iraq News Posted by Tishwash at TNT 8-20-2026

TNT:

Tishwash:  Removing zeros: A currency restructuring or a step to boost confidence in the dinar?

The issue of removing zeros from the Iraqi currency has resurfaced, amid economic debate about the feasibility of this step and its implications for the value of the dinar and the purchasing power of the citizen, as well as the readiness of the banking and financial sectors to implement it.

Economic experts believe that removing zeros, if implemented within a comprehensive study and a clear plan, could contribute to restructuring the currency and simplifying financial and banking transactions, while emphasizing that the measure itself does not mean an increase or decrease in the purchasing power of the dinar, as long as prices, salaries and savings are transformed at the same rate.

Strengthening the value of the dinar

Economic expert Haider Al-Sheikh told Al-Sabah newspaper: “Changing the Iraqi currency and removing zeros will enhance the value of the Iraqi dinar against foreign currencies,” explaining that “changing the currency will contribute to reviving the economy and providing cash liquidity to the government.”

The sheikh explained that the currency change process, according to the study, requires several months to print specific denominations in batches, in preparation for replacing them with the current currency. He pointed out that this process could contribute to strengthening the balances of government and private banks in Iraqi dinars and providing liquidity. 

The necessary cash.

He added that another benefit of the process is “knowing the amount of currency held by the government and banks, as well as knowing the volume of currency circulating in the market.”

The sheikh pointed out that Iraq, after 2003, printed more than 100 trillion dinars, indicating that about 70 percent of the printed cash is outside the government's control and stored in homes. And it is traded on the market.

 Renaming the monetary unit

For his part, economist Mustafa Faraj said that "removing zeros from the Iraqi currency, if implemented according to a comprehensive study and plan, represents a positive step towards restructuring the currency and simplifying financial and banking transactions," stressing that "the process itself does not necessarily mean an increase or decrease in value." 

The purchasing power of the dinar.

Faraj explained that removing three zeros, for example, means changing prices, salaries, and balances by the same percentage, and therefore the citizen's purchasing power does not change as a result of the removal alone.

He added that the main economic benefit is “reducing the volume of circulating figures, facilitating accounting and banking operations, supporting electronic payment systems, and making dealing in dinars more efficient and transparent,” stressing that the success of the step is linked to monetary stability, price control, and broad public awareness.

He explained that removing zeros could be part of a “broader monetary and banking reform package that enhances confidence in the dinar and supports economic stability.” 

It is not a single, formal procedure.

Risks of the conversion phase

In contrast, economic researcher Ahmed Eid warned that the most prominent risks that may accompany the removal of zeros are not related to the accounting removal process itself, but rather to the conversion phase and what may accompany it in terms of confusion in the markets and exploitation by some traders, especially in rounding prices upwards.

He explained that goods with small prices may be more likely to increase when converted to the new monetary unit, which, if this is repeated on a large scale, may lead to citizens feeling an actual increase in the cost of living, even though the process of removing zeros is theoretically supposed not to change purchasing power.

Eid pointed to other risks, including the weak financial literacy of some citizens, particularly with regard to converting cash savings, pricing goods and services, contracts and debts, as well as the possibility of speculation and rumors spreading about the value of the dinar.

He stressed that these risks become greater if the operation is carried out during an economic period suffering from financial pressures and problems related to liquidity and confidence.

Dual pricing and oversight

To protect the purchasing power of citizens, Eid called for the adoption of a sufficient transitional period preceding and accompanying the change process, during which dual pricing in the old and new dinars would be adopted, and precise rules would be put in place to prevent arbitrary rounding of prices, in addition to tightening control over markets and implementing a broad awareness campaign.

He stressed the need for the central bank to ensure that all bank accounts, savings, debts, salaries and contracts are converted in the same proportion, with the new currency being made available in an organized manner, and a period of simultaneous circulation of the two currencies being maintained.

He stressed that “the most important thing is that the removal of zeros should be preceded by real financial and monetary stability,” explaining that protecting purchasing power is not achieved by changing the form of the currency, but rather by controlling inflation, stabilizing the exchange rate and addressing financial and economic imbalances.  link

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Tishwash:  National Security Advisor to Qalibaf: The government is proceeding with restricting weapons to the state.

Baghdad/Al-Masalla: National Security Advisor Qasim Al-Aboudi confirmed on Thursday to Iranian Parliament Speaker Mohammad Baqer Qalibaf that the Iraqi constitution does not allow the existence of armed groups that threaten the security of other countries, while indicating that the government is proceeding with restricting weapons to the state.

The media office of the National Security Advisor stated in a statement received by Al-Masalla Agency that “National Security Advisor Qasim Al-Aboudi met with the Speaker of the Iranian Shura Council, Mohammad Baqer Qalibaf, who is currently visiting Iraq,” indicating that “the meeting discussed the latest developments in the region and ways to strengthen relations between Iraq and the Islamic Republic of Iran, in a manner that serves the interests of the two countries and the two friendly peoples.”

He added that “the meeting also included discussions on security agreements between Iraq and the Islamic Republic of Iran.”

Al-Aboudi stressed that “Iraq is committed to the joint security agreement between the two countries,” noting that “the relationship between the two friendly countries is a historical and close one, and the two peoples are bound by close ties.”

He added that “Iraq’s stability is in the interest of the region’s stability,” noting that “Prime Minister Ali Faleh al-Zubaidi’s government emphasizes strengthening relations with neighboring countries in particular and countries of the world in general, and this is in the country’s interest.”

He stated that “the Iraqi constitution does not allow the existence of armed groups that threaten the security of other countries,” explaining that “the government is proceeding with restricting weapons to the hands of the state.”

For his part, Qalibaf affirmed that “the Islamic Republic of Iran cherishes its relations with Iraq and supports the government program regarding the establishment of a legal framework that regulates weapons under the command of the Commander-in-Chief of the Armed Forces,” explaining that “his country is committed to the security agreements concluded between the two countries link

Tishwash:  The Cabinet approves a new mechanism for pricing crude oil.

In a move aimed at restructuring the economic portfolio and enhancing export and import capacities, the government took a series of sovereign decisions during the fifteenth regular session of the Council of Ministers, which was held on Tuesday evening under the chairmanship of Council Chairman Ali Faleh Al-Zaidi, which included the oil, finance, electricity, infrastructure, and international relations sectors.

As part of the government's procedures to increase export and import capacities, the recommendation regarding the purchase of crude oil was approved, based on the price of the State Oil Marketing Company (SOMO) or the price set in the general budget, whichever is lower, with a discount of (30%), to be determined annually, starting from (September 1, 2026), and paid to the public treasury, provided that its financial effects are reviewed in detail, with the implementation of the aforementioned study being based on lifting subsidies on the prices of petroleum products for all sectors, with the exception of the main products supplied exclusively to citizens (gasoline, gas oil, kerosene, and liquefied gas) from (September 1, 2026), and that any subsidy granted to any sector reduces the share of the public treasury, and the proposed mechanism is presented to the Federal Board of Financial Control for the purpose of adopting the amended accounting policy to avoid future audit observations.

In the oil sector as well, the Council voted to approve the mechanisms for exporting Iraqi oil through specialized international and local companies, and through different outlets, provided that the contracts are for a period of (3) working months starting from the date of (September 1, 2026).

The recommendation regarding exceptional approvals to increase export and import capacities was also approved, authorizing the Minister of Oil to establish additional transport routes for existing and current contracts, and to renew those contracts. The Minister was also authorized to approve the import of petroleum products when needed to ensure a stable supply and prevent crises, provided that the Oil Pipelines Company completes the expansion of loading platforms. Furthermore, approval was granted to commence work prior to contract signing for the rehabilitation of the IT2A station and a supporting unloading station for the IT1 station, with a capacity of 300,000 barrels per day. This will ensure the rapid delivery of imported raw materials without compromising the principles of competition and transparency.

As part of the procedures for regulating oil sales mechanisms, the Council approved the recommendation related to the mechanisms for advance payment of the prices of Iraqi oil sales, and the methods for companies purchasing the value of shipments to deposit, and advance payments into the relevant accounts belonging to the Ministry of Finance and the Central Bank of Iraq.

The council approved the continued payment of dues to Basra Gas Company for the value of its products delivered to South Gas Company, as it is a self-financing company.

The Council approved the Ministry of Oil's donation of (5) billion dinars to the Ministry of Health, allocated for the purchase of medicines, medical supplies, and laboratory equipment. In the electricity sector, the recommendation of the Central Review and Approval Committee for Referrals at the Ministry of Electricity was approved, regarding the adoption of Request for Proposals (RFPs) in the electricity distribution sector.

To enhance the procedures for collecting fees and taxes, the Council approved the adoption of the principle of pre-payment of customs duties and estimated tax deposits for imported goods, starting from (October 1, 2026), and the importer depositing the amounts of foreign transfer for import purposes with the authorized banks, and not transferring the amounts except after the importer pays the amounts of customs duties and estimated tax deposits through the (ASYCUDA) system, and the approved electronic payment mechanisms, and transferring them to the accounts of the public treasury and the competent accounts in the Ministry of Finance, within (15) days, and that the calculation of the amounts of customs duties and estimated tax deposits be based on the initial data provided by the importer, including the commercial invoice and shipping documents, or import, customs classification, type of goods, origin and value according to the approved customs tariff schedules.

As part of the government's efforts toward administrative and financial reform, the Council voted to amend the instructions regulating write-off procedures and accounting treatments. This amendment requires all government entities to submit records of debt and asset write-offs to the Federal Board of Supreme Audit for review before the authorized body makes a write-off decision.

The Ministry of Finance was also tasked with amending Instruction No. 1 of 2022, which regulates write-off procedures and accounting treatments, to ensure compliance with these amendments. Furthermore, the Cabinet approved the Ministry of Transport/Air Navigation Company's allocation of 15 billion dinars to the Ministry of Finance for border crossings, specifically for developing the infrastructure at the Rabia, Al-Walid, and Safwan border crossings.

The Council approved the recommendation to suspend the implementation of Cabinet Resolution (963 of 2025) until the end of (2026), provided that the local market is monitored during the suspension period. 

The council also voted to approve the extension of the Independent High Electoral Commission’s occupancy of school buildings until (December 31, 2027), provided that the commission submits a plan that includes time limits for vacating the occupied classrooms and school buildings in stages.

As part of the government’s measures to strengthen international relations, the Minister of Trade, or whomever he authorizes, was given the power to negotiate and sign the draft agreement for economic, trade, scientific, cultural, artistic and sports cooperation between Iraq and the Republics of Nigeria and Zambia.  link

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Tishwash:  State economic integration

The government of Prime Minister Ali Faleh al-Zaidi is adopting a program for financial reform and rationalizing spending in parallel with diversifying sources of revenue and reducing dependence on oil. The Ministry of Public Finance is facing pressure in providing the necessary liquidity to cover public expenditures, with a public spending volume of about 7 trillion and 800 billion dinars, which is not an exaggeration in relation to the size of the wealth of the Iraqi economy, and it would not have affected the size of liquidity or the money supply were it not for the systematic and organized corruption that has been dividing the state’s revenues for years into more than half.

The security operations conducted by the government to pursue corrupt individuals have revealed the enormous sums of money seized from those arrested, while investigations into other suspects continue. Beyond the issue of corruption itself, efforts to increase state resources necessitate measures and laws that do not harm citizens by imposing additional financial burdens that could overburden them due to flawed past economic policies.

Among the possible solutions for the state is to start collecting taxes owed by foreign and local companies and to expand electronic automation in government institutions to reduce financial waste, prevent duplication of work, and collect fees in a legal and proper manner, not by sharing them with other investors as happens in the matter of electricity privatization in some residential areas. In addition, there is the need to audit outstanding advances and loans and recover them from companies and individuals, and to work on reviewing collection contracts in state institutions to determine the size of the revenues that these institutions receive compared to the investor's share.

Some contracts have the investor's share reaching 75 percent of the revenues compared to 25 percent for the state, without knowing the details of the level of service provided by the investor and whether it actually warrants this percentage or is just corruption that drains the state's resources.

Another issue is the need to pay attention to the multiplicity of legislation and decisions that conflict with the investment law and confuse the investment environment instead of benefiting from its financial returns. Perhaps the question that arises regarding the reality of the economy in Iraq is, where do the solutions lie? Is it in institutional reform and combating corruption in a real and unambiguous way, or in controlling the state’s revenues in all their forms, whether local or foreign, in a centralized manner that is not subject to any political interference, or both together?

The strength of the economy lies in coordinating the work of the security, economic and political system with an integrated structure in which politics ensures the success of the other systems that run the life of the citizen.

When there are gaps that work to prevent the integration of these systems with each other with the aim of enriching themselves at the expense of public money, it is not possible to talk about any reform or economic development in the country, because public money will remain permissible under the names of projects and illusions of economic returns, and thus remain in the cycle of our only source of income, oil and nothing else.  link